By Jamison Cocklin
Sales-tax figures from the Ohio Department of Taxation show gains continuing across the Mahoning Valley, with modest upward collection rates in June and July, demonstrating consumers seem inclined to spend more this year than last.
The most recent data, which runs through July, is delayed because of a 60-day turnaround required for merchants to report the figures and for the Department of Taxation to process the funds and dole them out to the state and its 88 counties.
“Generally, it’s safe to say that when sales-tax receipts are up, the economy is up — there’s definitely a correlation there,” said Gary Gudmundson, chief spokesman for the ODT.
After a sea change in positive year-over-year gains from March through May, Columbiana County once again was the leading beneficiary, with a 10 percent increase in June, collecting nearly $2 million. In July, the county’s sales tax shot up 25 percent from the same month a year earlier to about $1.4 million.
The yearly gains do not take into account any price increases or inflation over the past year.
Columbiana is a beachhead for the Valley’s shale-gas operations, where 51 sites were under permit, 26 wells were being drilled and two were producing shale gas at the end of September.
In Mahoning County, June saw a 4 percent increase, with $2.6 million in tax receipts. In July, the county had a 3 percent gain when compared with 2011, taking in $2.7 million.
Trumbull was the only county to see a decrease. In July sales-tax collections dropped by 4 percent from 2011. The county posted a 7 percent gain in June with nearly $2 million collected.
Ohio’s economy, along with the national economy, generally is considered to be experiencing moderately low but uninterrupted rates of growth.
A strong summer for U.S. auto sales, combined with the fees and economic activity generated by further shale-gas drilling in the Valley, has sources agreeing that sales-tax revenue likely will continue rising.
“This simply means people have a little more expendable money,” said Carol McFall, Mahoning County’s chief deputy auditor. “When the market was in crisis, everyone quit buying; they’ve opened up their purses, and buying a car is a heck of a lot different than buying a sweater.”
McFall said Mahoning County expects to generate about $28 million in sales tax by year’s end, with a 3 percent increase in 2013 that would bump the figure up to near $30 million.
“That’s a big deal for us. Normally we don’t make predictions here,” she added. “But we’re feeling more confident, and Mahoning County is in a better position than other parts of the state with some of the growth we’ve had at places like V & M.”
According to the Ohio Office of Budget and Management’s September financial report, the statewide nonauto sales tax came in below expectations in August. The auto sales tax was also below estimates, but when compared with a year earlier, August receipts were up 2.3 percent.
Nationally, consumer sentiment hit a peak in September, and excluding problems at drug retailers such as Rite Aid and Walgreens, same-store sales rose by 3.6 percent, according to an analysis of select stores by Thomson Reuters.
A U.S. jobs report last week showed that the national unemployment rate dropped from 8.1 percent in August to 7.8 percent in September.
Ohio’s August unemployment rate of 7.2 percent, the latest month for which the figure is available, has created mild optimism. Ohio’s unemployment rate in August 2011 was 8.8 percent.
During the week ending Sept. 28, layoffs in the Mahoning Valley were lower than in any other urban area in the state, according to figures from Cleveland-based economist George Zeller.
“The increase in sales tax doesn’t necessarily make up for some of the funding losses in local government, but it’s certainly helping us to balance the general fund budget,” McFall said. “We predict the growth will continue, and if they lift some of the regulation on this shale gas, we’re set to be on a gold mine.”